Shell reduces Scope 3 emissions target
18 March 2024
UK-based oil major Shell is now targeting a 15-20% reduction by 2030 in the net carbon intensity of the energy products it sells, compared with 2016, against its previous target of 20%.
The company also plans to grow its liquefied natural gas (LNG) business in line with LNG being viewed as a critical fuel in the energy transition.
Related read: BP and Shell’s spending on renewables flatlines in 2023
“We are cutting emissions from oil and gas production while keeping oil production stable, and growing sales of low-carbon energy solutions while gradually reducing sales of oil products such as petrol, diesel and jet fuel,” the company’s Energy Transition Strategy 2024 report stated.
The firm aims to achieve net-zero emissions by 2050 across all its operations and energy products and said this target is transforming its business.
Progress
The company reported making progress against its climate targets. It said as of 2023, it achieved more than 60% of its target to halve emissions from its operations by 2030, compared with 2016.
The same year, Shell said it achieved 0.05% methane emissions intensity, which is significantly below its target of 0.2%, and in line with a target to achieve near-zero methane emissions by the end of the decade.
Shell also cited that it contributed to the World Bank’s Global Flaring and Methane Reduction Fund last year, which indicates its support for an industry-wide action to drive down methane emissions and flaring.
The company noted having hit – for the third consecutive year – its target to reduce the net carbon intensity of the energy products it sells, with a 6.3% reduction compared with 2016.
To help drive the decarbonisation of the transport sector, Shell has also set a new target to reduce customer emissions from the use of its oil products by 15-20% by 2030 compared with 2021.
Power shift
The company said that its focus on where it can add the most value has led to a strategic shift in its integrated power business.
“We plan to build our power business, including renewable power, in places including Australia, Europe, India and the USA, and have withdrawn from the supply of energy directly to homes in Europe.
“In line with this shift to prioritising value over volume in power, we will focus on select markets and segments,” the firm said, indicating an intention to sell more power to commercial customers, and less to retail customers.
“Given this focus on value, we expect lower total growth of power sales to 2030, which has led to an update to our net carbon intensity target.
“We are now targeting a 15-20% reduction by 2030 in the net carbon intensity of the energy products we sell, compared with 2016, against our previous target of 20%.”
Investments
Shell plans to invest between $10bn and $15bn between 2023 and the end of 2025 in low-carbon energy solutions.
It also cited investing $5.6bn on low-carbon solutions in 2023, more than 23% of its total capital spending.
These investments include electric vehicle charging, biofuels, renewable power, hydrogen and carbon capture and storage.
Related read: Shell abandons Iraq chemicals project
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Saudi Arabia expands PPP pipeline14 May 2024
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Rua Al Madinah seeks construction partners14 May 2024
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Emirates Group posts $5.1bn profit14 May 2024
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Neom receives bids for schools PPP
15 May 2024
Saudi Arabian gigaprojects developer Neom has received bids for a contract to develop and operate two schools in the SR1.5tn ($500bn) development.
According to a source close to the project, around a dozen local companies submitted proposals for the scheme in late April or early May.
The project is being procured on a build, own, operate and transfer (BOOT) basis.
It is understood Riyadh-based Banque Saudi Fransi Capital is the client's financial adviser for the project.
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Neom recently invited companies to bid for a contract to develop four hotels at Oxagon, the development's industrial cluster.
Neom expects to receive bids for the contract in July. The hotels, understood to have a total of 1,200 keys, will also be developed using a BOOT model.
Most of Saudi Arabia's gigaprojects have been shifting the physical and social infrastructure components of their developments, in addition to their utility infrastructures, to public-private partnership (PPP) models due to budgetary constraints and a need for a more efficient approach to procuring and operating these assets long term.
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Ewec plans new independent water project
15 May 2024
Abu Dhabi-based offtaker Emirates Water & Electricity Company (Ewec) is considering procuring a new independent water project (IWP), according to industry sources.
The planned seawater reverse osmosis (SWRO) facility is expected to have a capacity of 90 million imperial gallons a day (MIGD), equivalent to about 409,000 cubic metres a day (cm/d).
Sources have told MEED that the proposed location is either in Al Nouf or Taweelah in Abu Dhabi.
A facility in Al Nouf will require a long pipeline that will connect the plant to Abu Dhabi, and will likely involve the participation of the Abu Dhabi Transmission & Despatch Company (Transco), according to one of the sources.
It is understood that Ewec could seek interest from developers for the new IWP by the end of the year.
This development follows the revision of the scope and capacity of Abu Dhabi's fourth IWP scheme, which is currently in the tendering stage.
The Saadiyat Island IWP will have a capacity of 60 MIGD.
When it was tendered in July 2023, the original scheme – called the Abu Dhabi Islands IWP – comprised two SWRO plants each with a capacity of 50 MIGD, to be located on the Saadiyat and Hudayriat islands in Abu Dhabi.
The current tender closing date for the Saadiyat Island IWP project is 29 June.
"They need this additional planned capacity [in Al Nouf or Taweelah] since the other scheme in Hudayriat has been cancelled," the source added.
Ewec previously said these projects are important to Abu Dhabi’s water security due to their proximity to the load centre of the Abu Dhabi islands, as well as the scheduled decommissioning in 2028 of the integrated power and water desalination plant at Sas Nakhl.
As in previously tendered IWPs, the successful developer or consortium will own up to 40% of a special-purpose vehicle that will implement these projects, while the remaining equity will be primarily held indirectly by the Abu Dhabi government.
Awarded contracts 2023
Ewec awarded the contracts for two IWPs last year. Ewec, Abu Dhabi National Energy Company (Taqa) and France’s Engie signed the water purchase agreement for the Mirfa 2 IWP project in February 2023. They reached financial close for the project, which will have a capacity of 120 MIGD, two months later.
Taqa, Ewec and South Korea’s GS Inima reached financial close on the $444m Shuweihat 4 SWRO IWP in December. Located within the Shuweihat power and water complex, the facility will supply up to 70 MIGD of potable water. Commercial operations are expected to commence in the second quarter of 2026.
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Saudi Arabia expands PPP pipeline
14 May 2024
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Saudi Arabia’s National Centre for Privatisation & PPP (NCP) has seen significant progress in its public-private partnership (PPP) programme in the past year, according to Salman Badr, vice-president of the state PPP procuring authority.
Speaking at the MEED Mena Construction Summit in Riyadh, Badr said that NCP has a “healthy pipeline” of over 200 approved projects in different stages of development.
He noted that another 300 projects are currently under review.
It is understood that the pipeline includes more than 180 schools, following the award of contracts to develop and operate 60 schools each in Jeddah and Medina in 2020 and 2022.
“New sectors like healthcare and education have been opened up for public-private partnerships beyond the traditional water and power sectors,” said Badr.
The kingdom is understood to have awarded more than 60 PPP contracts since 2017, when NCP was formed.
Badr said private sector participation has “allowed the government to deliver infrastructure projects much more efficiently”.
Recently completed projects include the kingdom’s first hospital PPP project in Medina.
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Rua Al Madinah seeks construction partners
14 May 2024
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Saudi Arabia’s Rua Al Madinah, the Public Investment Fund (PIF) subsidiary tasked with Medina’s tourism and cultural development, has revealed that construction work is under way on the main tunnel that will take all incoming traffic towards the Harem area.
Extensive works are also ongoing to redevelop the airport road and modernise the city’s wider transportation network.
“There are significant opportunities for contractors and partners,” said Abdulsalem Alharbi, projects delivery director, Rua Al Madinah, at the MEED Giga Projects event in Riyadh on 13 May.
“We are looking for capable service providers and strategic partners to support the large-scale infrastructure and construction works.”
Alharbi said five packages of residential towers – comprising over 120 towers in total – are currently in various stages of design and tender.
The superblock 5 package includes 18 towers and is already on the market, while superblock 4, involving 19 towers, is in the design phase.
Packages District 9 and District 10, consisting of 35 towers and 46 towers, respectively, are seeking partners to take on development roles.
Alharbi also highlighted several investment opportunities being developed to support the growing tourism sector, including a central kitchen, cold storage warehouse, commercial laundry and staff accommodation facilities.
“This represents a major chance for local and international companies to participate in the redevelopment of Medina,” he added.
Project background
Crown Prince Mohammed Bin Salman Bin Abdulaziz Al Saud inaugurated the infrastructure works and unveiled the masterplan for the Rua Al Madinah development in August 2022.
Before this, US-based Hill International was awarded a contract in 2021 for the project management of road works at the Madinah Central Area (MCA).
In June 2022, a local media report cited China Railway 18th Bureau as having won a contract to build the Medina tunnel.
The tunnel, valued at $970m, was expected to be completed within 42 months. The work includes building the AH tunnel, the Ali Bin Abi Talib tunnel, the airport tunnel and related projects, including a pedestrian bridge.
Rua Al Madinah Holding Company CEO Ahmed Al Juhani told MEED in February that construction work on the Ali Bin Abi Talib road has been completed, making it the first tunnel to be finished as part of the Rua Al Madinah project.
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Emirates Group posts $5.1bn profit
14 May 2024
Emirates Group, comprising Emirates Airline and Dnata, has posted a record profit of AED18.7bn ($5.1bn) in its latest fiscal year ending 31 March, up 71% compared to a AED10.9bn profit for last year.
The group’s revenue stood at AED137.3bn, an increase of 15% over last year’s results.
Its cash balance was AED47.1bn, the highest ever reported and an 11% increase from last year.
According to its annual report, the group's profits for the last two years reached AED29.6bn, which has surpassed pandemic losses of AED25.9bn in 2020-22.
The group has declared a dividend of AED4bn to its owner, the Investment Corporation of Dubai.
Emirates Group chairman and CEO, Sheikh Ahmed Bin Saeed Al Maktoum, attributed the company's record performance to Dubai’s progressive policies.
He added that profits enable further investments in new aircraft, facilities and equipment, technology, products and services, and staff.
Business performance
Emirates reported a new record profit of AED17.2bn, up 63% from AED10.6bn last year.
The airline's revenue rose 13% to AED121.2bn while capacity increased by 20% to 57.7 billion available tonne-kilometres.
The group's cargo and logistics arm, Dnata, reported a profit of AED1.4bn, up more than four-fold compared to its AED331m profit last year.
Revenue increased 29% to hit a new record high of AED19.2bn, reflecting increased customer flight activity and travel demand across its UAE and worldwide business divisions.
Investments and outlook
In 2023-24, the group collectively invested AED8.8bn in new aircraft, facilities, equipment, companies and the latest technologies to support its growth plans.
In line with this, Emirates expects to receive delivery of 10 new A350 aircraft in 2024-25.
The group’s total workforce grew by 10% to 112,406 employees, its largest ever.
In terms of environment, social and governance (ESG) initiatives, in 2023-24, Emirates signed new supply agreements to uplift sustainable aviation fuel (SAF) at its Dubai hub for the first time, and also in Amsterdam and Singapore.
The airline operated the first A380 demonstration flight using 100% SAF in one engine, collecting data to support industry efforts to enable a future of 100% SAF flying.
The business outlook is positive and the group expects customer demand for air transport and travel to remain strong in the coming months.
"As always, we will keep a close watch on costs and external factors such as oil prices, currency fluctuations and volatile environments caused by socio-political changes," said Sheikh Ahmed.
"Our business model has been tested before, and I am confident in our resilience and ability to respond quickly to opportunities and challenges.”
Sheikh Ahmed affirmed the Dubai government's plan to start the next phase of expansion at Al Maktoum International airport, which will eventually be the new hub for Emirates' and Dnata’s operations.
"This AED128bn investment will significantly expand and enhance Dubai’s aviation and logistics infrastructure, supporting the city’s growth, and Emirates’ and Dnata’s growth," he added.
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